Ok, thanks. How can we know it was fixed. And what dictates the "pegging"?
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Ok, thanks. How can we know it was fixed. And what dictates the "pegging"?
Posted Using LeoFinance Beta
As long as HBD stays between 0.950 and 1.050, the peg is OK. Anything outside this margin is reason for concern (even if it looks like a good deal).
Since HBD is an algorithmic stablecoin, part of the algorithm is enforcing something called the haircut rule. This indicates that the market cap for native HBD is 10% the market cap for native HIVE; "native" is anything on the blockchain or the internal markets. If there is too much native HBD in relation to the rule, then additional HIVE is created until the market cap ratio is restored.
My understanding is that if you're looking at HBD or HIVE at centralized exchanges (or wrapped versions of HBD/HIVE), then the haircut rule does not apply. For anyone else seeing this comment, please confirm or correct as needed.
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